Buying a house is one of the most expensive things most people will ever do. With the average home in the United States now costing more than $200,000, it will take a half a million dollars to buy it outright once the interest on the loan is taken into consideration and for most people, thirty years of hard work. But what if something happens to you during the life of your mortgage? What will happen to your family if you should die before the house is paid off? Will they have a place to live?

One solution to this scenario, called mortgage life insurance, is offered by most lending companies. This is an insurance policy that the buyer purchases along with the loan; the premium is added to the monthly house payment. Should the buyer die or become disabled, the home loan will be paid off.

This may sound like a good idea. Should you buy it?

That depends. The idea is certainly a good one; no one wants their family to become homeless in the event of an untimely death. On the other hand, such a policy is rather limited. It does one thing only – it pays off the mortgage. A better alternative might be a term life insurance policy, which would simply pay cash to a designated beneficiary. He or she could then use it to pay off the mortgage or they could use if for other needs. This might offer greater flexibility than would mortgage insurance.

Term life insurance might be cheaper, as well. This will depend on the age and health of the applicant. For someone under 40 in good health, term insurance might be a great deal cheaper. For someone older, someone with poor health, or someone who smokes, the mortgage insurance might be a better deal, as premiums for life insurance can increase dramatically under those circumstances. Most people who wish to protect their assets would probably be best served by a term life insurance policy, anyone who has any questions about it should probably consult with both their insurance agent and a representative from their mortgage company.

©Copyright 2006 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to personal bankruptcy, debt consolidation, establishing credit and credit counseling and HomeEquityHelp.net, a site devoted to information regarding mortgages and home equity loans .